The placement of physical certificates for securities and financial instruments in a common depository or a central securities depository so that subsequent transfers can be made by book entry (i.e. by debiting and crediting holders’ accounts at the depository).

implied volatility

A measure of expected volatility (standard deviation in terms of annualised percentage changes) in the prices of, for example, bonds and stocks (or of corresponding futures contracts), which can be extracted from option prices.

A measure of the changes over time in the direct outcome of collective bargaining in terms of basic pay (i.e. wages and salaries excluding bonuses) at the euro area level. It refers to the implied average change in monthly wages and salaries.

indirect holding system

A multi-tiered arrangement for the custody and transfer of ownership of securities (or the transfer of similar interests therein) in which investors are identified only at the level of their custodian. Antonym:
direct holding system

indirect link

A link between two central securities depositories (CSDs) through a non-CSD intermediary. See also
direct linkrelayed link

indirect participant

A participant in a funds or securities transfer system with a tiering arrangement that uses a direct participant as an intermediary in order to perform some of the activities allowed in the system (particularly settlement). See also
direct participanttiering arrangement

indirect taxes

Taxes on production and imports receivable by general government that are compulsory, unrequited payments, in cash or in kind, levied by general government in respect of the production and import of goods and services, the employment of labour, the ownership or use of land, buildings or other assets used in production (ESA 2010 4.14-4.29). These taxes are not consolidated. For example, taxes on the use of buildings by government entities should be included in both revenue and expenditure.

industrial producer price

The factory-gate price (transportation costs are not included) of any product, excluding imports, sold by industry excluding construction on the domestic markets of the euro area countries.

industrial production

The gross value added created by industry at constant prices.

inflation

An increase in the general price level, e.g. in the consumer price index. See also
deflation

inflation risk premium

Compensation of investors for the risks associated with holding assets (denominated in nominal terms) over the longer term.

inflation targeting

A monetary policy strategy aimed at maintaining price stability by focusing on deviations in published inflation forecasts from an announced inflation target.

inflation-indexed government bond

A debt security issued by the central government, the coupon payments and principal of which are linked to a specific consumer price index.

initial margin

For instruments cleared by a central counterparty (CCP), the amount of collateral that each participant is required to provide to the CCP (or the clearing member) in order to cover potential losses in the event of that participant defaulting. The initial margin is calculated on the basis of a formula set by the CCP. See also
haircutmargin

institutional unit

An economic entity that is capable of owning goods and assets, of incurring liabilities and of engaging in economic activities and transactions with other units in its own right. Refer to the definitions provided in the ESA 2010.

insurance corporations and pension funds (ICPFs)

According to the ESA 2010, the insurance corporations subsector consists of all financial corporations and quasi-corporations which are principally engaged in financial intermediation as a consequence of the pooling of risks mainly in the form of direct insurance or reinsurance; the pension funds subsector consists of all financial corporations and quasi-corporations which are principally engaged in financial intermediation as the consequence of the pooling of social risks and needs of the insured persons (social insurance). Pension funds as social insurance schemes provide income in retirement, and often benefits for death and disability.

In the context of data, the quality of being protected against accidental or fraudulent alteration in transmission or in storage. Alternatively, the quality of indicating whether or not such alteration has occurred.

integrity of a securities issue

The result of legal requirements and securities accounting procedures ensuring that the number of securities issued is, at all times, equal to the total number of securities in circulation (i.e. validly booked in investors’ accounts).

interbank funds transfer system (IFTS)

A funds transfer system in which all (or almost all) participants are credit institutions.

interbank money market

The market for short-term lending between banks, usually involving the trading of funds with a maturity of between one day (overnight or even shorter) and one year.

interchange fee

A transaction fee payable between the payment service providers involved in a transaction.

interest rate

The ratio, usually expressed as a percentage per annum, of the amount that a debtor has to pay to the creditor over a given period of time to the amount of the principal of the loan, deposit or debt security.

interest rate future

An exchange-traded forward contract. In such a contract, the purchase or sale of an interest rate instrument, e.g. a bond, is agreed on the contract date to be delivered at a future date, at a given price. Usually no actual delivery takes place; the contract is normally closed out before the agreed maturity.

interest rate swap

A contractual agreement with a counterparty to exchange cash flows representing streams of periodic interest payments in one currency. See also
cross-currency swap

interest-bearing claim

Any financial asset that gives its owner the right to receive interest payments from the debtor who issued the asset.

interest-growth differential

The difference between the annual change in nominal GDP and the nominal average interest rate paid on outstanding government debt (the “effective” interest rate). It is one of the determinants of changes in the government debt ratio. See also
debt ratio

Internal Capital Adequacy Assessment Process (ICAAP)

Comprises strategies and processes used by banks to assess and maintain, on an ongoing basis, the amounts, types and distribution of internal capital that they consider adequate to cover the nature and level of the risks to which they are or might be exposed. The competent authorities review the ICAAP as part of the SREP. See also
Supervisory Review and Evaluation Process (SREP)

Internal Liquidity Adequacy Assessment Process (ILAAP)

Comprises strategies, policies, processes and systems used by banks to identify, measure, manage and monitor liquidity risk over an appropriate set of time horizons, including intra-day, in order to ensure that institutions maintain adequate liquidity buffers. The competent authorities review the ILAAP as part of the SREP. See also
Supervisory Review and Evaluation Process (SREP)

internal model

Any risk measurement and management approach applied in the calculation of own funds requirements that is proprietary to a credit institution and requires prior permission by the competent authority in accordance with Part Three of the CRR.

internal rate of return (IRR)

A rate at which the accounting value of a security is equal to the present value of the future cash flow.

internal settlement

Settlement that is effected through transfers of securities and/or funds on the books of a bank or investment firm, as opposed to settlement via an interbank funds transfer system or a central securities depository (CSD).

International Bank Account Number (IBAN)

An International Organization for Standardization (ISO) technical code that is an expanded version of the basic bank account number (BBAN). Intended for use internationally, the IBAN uniquely identifies an individual account at a specific financial institution in a particular country. The IBAN also includes the bank identifier of the financial institution servicing that account.

international central securities depository (ICSD)

A central securities depository (CSD) which was originally set up to settle Eurobond trades and is now active also in the settlement of internationally traded securities from various domestic markets, typically across currency areas. At present, there are two ICSDs located in EU countries: Clearstream Banking in Luxembourg and Euroclear Bank in Belgium.

international investment position (i.i.p.)

A statistical statement that shows at a point in time the value and composition of (a) financial assets of residents of an economy that are claims on non-residents and gold bullion held as reserve assets, and (b) liabilities of residents of an economy to non-residents.

International Monetary Fund (IMF)

An international organisation, based in Washington, D.C., with a membership of 189 countries (2017). It was established in 1946 to promote international monetary cooperation and exchange rate stability, to foster economic growth and high levels of employment and to help member countries to correct balance of payments imbalances.

international reserves template

A statistical statement used to report the stock of reserve assets, other foreign currency assets and reserve-related liabilities of the Eurosystem on a specific reference date.

interoperability

The set of arrangements/procedures that allows participants in different systems to conduct and settle payments or securities transactions across systems while continuing to operate only in their own respective systems.

intervention at the limits

Compulsory intervention by national central banks if their currencies reach the floor or the ceiling of their ERM II fluctuation margins. See also
ERM II fluctuation margins

intra-euro area trade

The exchange of (i.e. trade in) goods and services between individual euro area countries.

intra-marginal intervention

Intervention by a national central bank to influence the exchange rate of its currency within its ERM II fluctuation margins. See also
ERM II fluctuation margins

intraday credit (daylight credit)

Credit extended and reimbursed within a single business day.

intraday finality

Final settlement achieved continuously or at various times in the course of the settlement day. Intraday finality can be provided through real-time settlement procedures and/or the settlement of the results of batch processing during the settlement day.

intraday liquidity

Funds which are available or can be borrowed during the business day in order to enable financial institutions to effect payments/settlement. Repayment of the funds borrowed should take place before the end of the business day. See also
intraday creditsame-day funds

inverse floating rate instrument

A structured note where the rate of interest paid to the holder of the note varies inversely with changes in a certain reference interest rate.

investment firm

Any entity whose regular occupation or business is the provision of one or more investment services to third parties and/or the performance of one or more investment activities on a professional basis.

investment fund (IF)

A collective investment scheme that raises funds by issuing shares or units to the public. The proceeds are invested in financial assets and in non-financial assets (usually real estate).

investor CSD

A term used in the context of central securities depository (CSD) links. An investor CSD – or a third party acting on behalf of the investor CSD – opens an account in another CSD (the issuer CSD) so as to enable the cross-system settlement of securities transactions. See also
central securities depositoryCSD linkissuer CSD